NCPA - National Center for Policy Analysis

The Jitney Potential: Transportation for the Poor

December 14, 2011

Low-income families need transportation.  The automobile is the most convenient form of transportation, but it is expensive to own and operate.  Fares for public transit, such as buses, are low, but the service is slow and inflexible, says Jennifer Dirmeyer, an assistant professor of economics at Hampden-Sydney College. 

  • Transportation costs account for about 17 percent of the total household expenditures of the average American family, according to the Bureau of Labor Statistics -- second only to housing costs.
  • Thus, policies that affect transportation options have a significant impact on the general welfare of Americans.

In an ordinary market entrepreneurs would solve this problem by creatively meeting people's needs.  However, transit is so regulated that even the simplest solutions are often outlawed. 

Competitive private bus or van services are called jitneys -- vehicles with flexible schedules and stops (like a taxi) that offer a ride along a route that is fixed (like a bus), but from which the driver can detour, if passengers are willing to pay more.  In the early 20th century, such services were widespread in urban areas.  However, they competed with trolley lines and bus monopolies, and most jitney services disappeared by the 1920s.  

  • In most U.S. cities, the limit on the number of taxis ensures that they do not provide jitney services, rather than more profitable taxi service dispatched by a limited number of cab companies.
  • Other regulations restrict vehicle size, group riding or shared rides.
  • Furthermore, many cities explicitly bar competition between taxis and buses by prohibiting taxis from soliciting passengers at bus stops.
  • Licensed livery vehicles including limos, commuter vans and shuttles are also strictly regulated like taxis.

Three distinct reforms are necessary to permit jitney operators to provide services valuable to low-income consumers:

  • Eliminate prohibitions on group riding.
  • Eliminate regulations that prohibit commuter vans from picking up passengers without an appointment and from accepting street hails.
  • Eliminate restrictions either on the number of jitneys per route or the number of jitney routes or the ability to deviate from a route.

Source: Jennifer Dirmeyer, "The Jitney Potential: Transportation for the Poor," National Center for Policy Analysis, December 14, 2011.

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